2022: Smart & Final Pays $175 000 for Pandemic-Era Egg Price Gouging in California
Published on by SOE Monitor Team
California Attorney General Rob Bonta has settled allegations that grocery chain Smart & Final illegally hiked prices on cage-free and organic eggs during the early weeks of the COVID-19 crisis.
The consent judgment requires the company to pay $175 000 in civil penalties and permanently enjoins it from future price-gouging violations under California’s Unfair Competition Law and Penal Code § 396. source
An investigation found that between March 4 and June 22 2020, Smart & Final raised the retail price of four premium egg products by more than 10 %, selling over 100 000 cartons at unlawful mark-ups. source
Timeline of Events
| Date | Event |
|---|---|
| Mar 4 2020 | Governor Gavin Newsom issues a State-of-Emergency proclamation for COVID-19, automatically activating the 10 % cap in Penal Code § 396. source |
| Apr 3 2020 | Executive Order N-44-20 extends the statute’s protections through Sep 4 2020, well beyond the initial 30-day window. source |
| Mar 4 – Jun 22 2020 | Smart & Final’s unlawful price increases occur. source |
| Apr 5 2022 | Settlement announced by AG Bonta—22 months after the last cited violation. source |
Enforcement Details
California received a surge of consumer complaints about soaring egg prices as stay-at-home orders took hold. Investigators determined that Smart & Final could not justify its increases with higher supplier or operating costs, making the mark-ups illegal under § 396—which allows a defense only when price hikes are directly tied to documented cost inflation. source
Why This Matters
Food retailers have faced intense scrutiny throughout the pandemic; this case shows that:
- Essential-goods enforcement is retroactive. Agencies can—and do—strike more than a year after the alleged conduct ends.
- The compliance clock starts immediately. The emergency declaration became effective the day it was signed; Smart & Final’s violations began almost at once.
- Cost documentation is critical. Without contemporaneous proof of supplier increases, even temporary retail adjustments may violate § 396.
The narrow window between declaration and enforcement action highlights why many multi-state retailers now rely on real-time State-of-Emergency monitoring tools to flag new declarations before shelf prices change.
Disclaimer: All enforcement details are based on publicly available government and news sources as of June 3 2025. This article is for informational purposes only and does not constitute legal advice.